During the first half of this year, China's economy pressed forward under pressure, sustaining a generally stable trajectory while transitioning toward innovation and higher quality, with the gross domestic product (GDP) expanding by 4.7% year-on-year. We effectively navigated shifts in the external environment, including geopolitical conflicts and trade frictions, and skillfully managed complex domestic conditions marked by strong supply against weak demand and overlapping new and old challenges, achieving results that were both hard-won and commendable.
Relative to targets, the 4.7% growth rate aligns with expectations. The annual growth target of 4.5% to 5% set by the Central Economic Work Conference and the National People's Congress and Chinese People's Political Consultative Conference sessions falls within this reasonable range, and the first-half performance of 4.7% sits squarely within it, conforming to the Party Central Committee's scientific assessment and strategic requirements, thereby laying a solid foundation for a strong start to the upcoming 15th Five-Year Plan period. Key economic indicators are operating steadily, with employment and prices remaining stable. The 4.7% pace is broadly consistent with the current conditions of factor supply, technological progress, and institutional innovation, representing a rate that is pragmatic and in line with potential economic growth. Major economic provinces generally grew faster than the national average, playing a pivotal role. Concurrently, financial risks continued to subside in the first half, with local government debt risks being resolved in an orderly manner. The easing of various constraints, neither too tight nor too loose, has preserved room to address uncertainties and enhance development quality.
Looking at the structure, 4.7% represents growth with substantive value. Behind this growth rate lies an economy transitioning toward new drivers and optimizing its structure, delivering a performance that is both stable in foundation and dynamic in momentum. The technological intensity has increased. New quality productive forces are accumulating strength, with chain-leading innovative enterprises possessing core technologies and specialized, refined, distinctive, and innovative small and medium-sized enterprises emerging and growing rapidly. New momentum contributed over 40% directly to economic growth in the first half of the year. Artificial intelligence is empowering various industries, with a new generation of open-source large models released recently and systematic Chinese solutions proposed for AI ecosystem building and governance order. Innovation results are continuously emerging, with AI-related patent grants surging by 34.8% year-on-year. The green intensity has deepened. The pace of green, low-carbon energy transition has accelerated, with clean energy generation from scale-above enterprises accounting for 36.2% of the total in the first half. Green new momentum is growing swiftly, with lithium battery production up 39.3% and the cumulative penetration rate of new energy vehicle retail reaching 54.1%. Zero-carbon industrial parks and transport corridors are being developed in an orderly fashion. The livelihood focus has strengthened. Efforts to stabilize employment, expand capacity, and enhance quality have been implemented, with greater social security support and steady income growth. In the first half, the national per capita disposable income of residents rose 5.2% in nominal terms year-on-year. Consumption continues to expand, with new growth points like service and experiential consumption being cultivated. Service retail sales grew 5.3% in the first half, consumption in county-level and lower-tier markets is leading growth, and holiday and inbound consumption remain robust.
Pressing forward against headwinds, the 4.7% growth rate demonstrates strong resilience. The compounding of adverse external impacts with domestic cyclical and structural pressures has been met with a credible performance, showcasing the economy's robust capacity to withstand shocks and self-regulate. Externally, geopolitical instability persists, with conflicts in the Middle East disrupting global energy markets, leading many countries to face energy shortages and soaring oil prices. China, having planned ahead with a new energy system and strategic petroleum reserve development, and implementing a market diversification strategy, has effectively ensured stable and affordable energy supplies. There have been no oil shortages in the market over the past six months, and energy security is increasingly assured. Additionally, amidst rising global trade protectionism and increased tariffs and non-tariff barriers, Chinese products, offering high value for money, are gaining favor among consumers in more countries. Export performance is strong, with products ranging from electric vehicles, lithium batteries, and photovoltaics to advanced offerings in AI, robotics, and innovative drugs, which are reshaping the foreign trade landscape through frontier technology and original innovation. Internally, the resolution of accumulated risks over years, such as local government debt, real estate market adjustments, and risks in small and medium-sized financial institutions, has had a certain contractionary effect on the economy, incurring some costs in terms of growth. However, this short-term cost is exchanged for long-term, stable, and sustainable economic and social development. Furthermore, from the perspective of market fundamentals, the contradiction of strong supply versus weak demand remains prominent, particularly with significant pressure on investment to stabilize and rebound. Investment growth is closely linked to the development stage. Current investment policy focuses not simply on maintaining a certain pace but on adapting better to high-quality development requirements, placing greater emphasis on investment quality and comprehensive benefits. In the first half, efforts were concentrated on strengthening the coordinated development of the "six networks," promoting manufacturing upgrading, and addressing shortcomings in water conservancy and urban underground pipeline networks, channeling more resources toward future-oriented and livelihood investments.
Looking ahead, the 4.7% growth rate is one with ample potential. China's economy possesses vast room for maneuver, immense market potential, and strong resilience and vitality. Growth potential is evident. With continued increases in R&D investment, China's capacity for original innovation is strengthening. The deep integration of scientific and technological innovation with industrial innovation is turning innovation-driven development into a powerful engine for economic growth. China's talent pool is globally leading, with human capital steadily transitioning from a demographic dividend to a quality dividend. New production factors such as data and computing power continue to empower traditional factors, collectively supporting high-quality economic development. Reform brings dividends. We focus on using reform methods to solve development challenges, and the economy's endogenous momentum is consistently strengthening. The construction of a unified national market is advancing in depth, with rectification efforts underway on issues like local governments' irregular investment attraction, market access barriers, and problems in public bidding, which will expand the breadth and depth of the market and further unleash the potential of the super-large market. Continued comprehensive management of "involutionary" competition will foster a healthier market environment, compelling enterprises to move away from competition based solely on price and accelerate the shift from scale expansion and price competition towards quality enhancement and value competition. Policy space exists. Compared to some economies that rely on high debt and deficits to stimulate growth, China has not pursued a path of excessive reliance on strong policy stimulus. Aggregate policies remain proactive and effective, while structural policies are precisely targeted, avoiding the formation of a "policy dependency." Overall, the fundamental conditions and long-term positive trajectory of China's economy have not changed. The macro-policy toolkit is well-stocked, there is still considerable room for counter-cyclical adjustment, and we are well-positioned to introduce practical and effective incremental policies based on evolving circumstances, with the capacity to achieve the annual economic and social development goals and tasks.
Comments